Home > Budget 2019 > News > Central government, states to get tough on GST refund claims
On Tuesday, officials also explored ways of sharing data among the GST Council, CBIC, CBDT, the revenue department and the various enforcement agencies under the government. (Photo: iStock)
On Tuesday, officials also explored ways of sharing data among the GST Council, CBIC, CBDT, the revenue department and the various enforcement agencies under the government. (Photo: iStock)

Central government, states to get tough on GST refund claims

  • The move to tighten enforcement measures comes amid the continued shortfall in GST revenue collections
  • The decision to deal with fake tax refund claims by businesses and traders with no leniency was taken at a meeting of central and state officials

NEW DELHI : Central and state government officials on Tuesday decided to scrutinize goods and services tax (GST) refund claims more diligently, compulsorily investigate all fake claims and step up coordination between income-tax and GST authorities.

The move to tighten enforcement measures comes amid the continued shortfall in GST revenue collections.

The decision to deal with fake tax refund claims by businesses and traders with no leniency was taken at a meeting of central and state officials in the capital.

At the meeting, led by revenue secretary Ajay Bhushan Pandey, it was decided to set up a panel of officers to recommend quick measures to curb “fraudulent refund claims, including the inverted tax structure refund claims and evasion of GST", said an official statement. The panel will give its advice within a week, which may be implemented across the country by January-end, it added.

With lower-than-expected revenue collection leading to friction between Union and state governments, primarily over delays in compensation payments to states, the authorities have decided to become more strict in their approach to enforce provisions of the law. In the first two years since the indirect system was introduced, the government had taken a lenient view to help businesses make a smooth transition to the new tax regime.

On Tuesday, officials also explored ways of sharing data among the GST Council, Central Board of Indirect Taxes and Customs (CBIC), Central Board of Direct Taxes (CBDT), the revenue department and the various enforcement agencies under the government.

Considering that fraudulent claims for input tax refunds are made on raw material of products allegedly exported, officials explored the possibility of linking GST refund for risky and new exporters with the foreign exchange remittances they receive.

The other proposal was to insist on a single bank account for foreign remittance receipt and GST refund disbursements.

Verification of tax credits availed by taxpayers that do not match with what their suppliers have disclosed was also discussed, the statement said.

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